Discuss about The economic essential of digital strategy.
This report depicts the effect of digital disruption in the business organization, Netflix. It is defined that before and after the digital disruption different level of changes might occur that would again make measurable changes in the organizations too. Adoption of new different technologies acts as a catalyst for business success (Bradley and O’Toole 2016). In order to provide an effective digital future to the business organization the system developers of the organization wills to change the digital platform from the traditional one. The identified issues for which the changes are required are elaborated in this report.
In addition to this, the status of the work centered analysis before and after the digital disruption are illustrated in this report. One of the most well known American entertainment companies founded in the year of 1997 had to face digital disruption due to their initial business model (Moller, et al. 2017). The company was specialized in serving streaming media, DVD and also on demand online videos. In 2017, the company had around 109.26 million of consumers throughout the world. Basically their efforts for producing new products with high security and additional content their profit is also ranging from the $16.9 to $21.10 within 2017.
Discussion on case details of Netflix
Netflix is a streaming service provider that allows the consumers to watch wider variety of different TV shows, movies as well as documentaries. It provides different internet connected devices too (Kramer and Kalka 2017). Moreover, it can be said that, Netflix allows the consumers to enjoy unlimited opportunities to view different contents even without any kind of commercials. Though the company has huge number of viewers throughout but still for getting more competitive advantages they wished to expand their business and during making this change, they faced different issues those are required to be resolved sooner. In order to add more contents such as TV shows and movies as well they must undertook digital disruption in their company (Rosenstand et al. 2017). However, in order to gain measurable revenue from the competitive market including meeting the requirements of the consumers they changes their service platform into a cloud based one.
Proper identification of the case
Problems of Netflix case
In the year of 2016, Netflix company announced that, they are willing expanded their business in around 130 countries within a day only. However, their service will not be available in China International market. Though, the expectation delivered a mixed resultant to their consumers and even to the company. In the initial three months of 2016, the net profit of the company was calculated to be internationally good. On the other hand in the second quarter of 2016, they failed to reach their expectation (Davis and Zboralska 2017). However, after the forecast of the company, it is found that the growth of the way for the company was below the street target measured by the company. The reasons for which they faced trouble in the international market are as follows:
Local content limitation: There is a different company who serves effective service throughout. This particular limited amount is extremely related due to the religion competitors in the developed marketplace such as France, Germany etc (Riemer et al. 2015). It is found that the contents offered by Netflix are limited and the other competitors of the company offers more localized content to their consumers. This is a major trouble to the company which is needed to be resolved.
Barriers in language: Netflix mostly offers English contents to their consumers that might hamper many counties like Russia, Portugal demand. According to the census of 2010, only 5% of the country could speak English. Therefore, language barrier is referred to as main issues for Netflix that hampered the revenue of the company.
High expense: Many companies are there which offers similar kinds of services to the consumers. In order to develop the market of the competition level, significant changes are needed to be considered by the company. The initial requirement of any consumer is to adopt affordable subscription services (Flew 2017). However, in case of Netflix the monthly subscription charge was found to be very high than the others. This is the reason for which the number of consumers for the company is reducing day by day.
Goals of the case
The goal of Netflix is to deliver successful, on-time and affordable services to the consumers throughout the world avoiding expense issues and language barriers as well. It is expected that as soon as the company would start delivering affordable services to the consumers it would be able to gain competitive advantages and measurable revenue from the market as well. Moreover, the goal of the company is to resolve all the identified issues including few of the flaws. Other current ethical issues that have been identified by Netflix is that they lied to the public about their services openly.
Therefore collective it is determined that the goal of the company is to deliver data caps those are restricted to avoid ethical dilemma. Apart from this, the communication team of Netflix also wills to offer good streaming experiences for the consumers for avoiding unexpected fines from the mobiles service providers.
Challenges associated to digital disruption
Different challenges might occur after the digital disruption. It is define that if digital disruption took place in the companies then the operational and functional ability of the company would be affected automatically (Kramer and Kalka 2017). The challenges associated to digital disruption are as follows:
Security: During the digital disruption due to lack of security most of the information could be hijacked with unauthenticated external assaults.
Data loss: In order to avoid the issues with services, delivery and price the company is willing to transfer their digital platform to a cloud based one. It is expected that it would help the business organization to resolve the issues accordingly (Valentine 2016). While changing the platform information might get lost from the server. If proper backup and disaster recovery plans are not added to the services then, data would surely get lost and cannot b ever retrieved again by the service providers.
Recommendation to the company
Different alternative solutions are there that helps to ensure the improvement of the Netflix services. The recommendation for the company is as follows:
- Development of modern streaming to make sure that Netflix has reached the growth of the operators
- To avoid the poor streaming issues throughout the world is facing
- Consumers should get on-time and secured services
Implementation plan based on the recommendations
In order to avoid the issues of security, communication, lack of availability of local contents Netflix is focused to bring digital disruption in their marketplace. The goal of the company is to deliver on time, accurate secured and enough content to the consumers throughout the world. In order to deliver services avoiding these issues, the company has changed their business model concept entirely. Netflix has developed a web based catalog service to their consumers which are able to rent movies of older time in the DVD format. They could deliver this service through mails also. Through this cloud based online website the consumers could develop their movies wish list (Flew 2017). According to the currently implemented service they would be allowed to deliver three movies from the consumer’s wish list with a minimal subscription charge which is $19.96 in each month. The profit of this service implies that there would be no such return deadline and late charges for the DVDs sent through emails. Even Netflix could also introduce a service for delivering movies and other television shows directly to the consumer’s PCs. It is expected that with the service quality Netflix could compete apple, Amazon etc. The other reasons for which it is determined that Netflix would reach success are as follows:
- They could make deals with Disney, CBS and Epix for the TV content
- This could introduce easy watch services as little as $8.98 per month
- It would introduce limitless TV and movies streaming services
- It could separate the online streaming videos and mail services for delivering DVDs to the consumers
From the overall discussion it can be concluded that, digital disruption is referred to as one of the important steps that has to be taken by different business organizations to minimize the rate of digital errors. Netflix a well-known entertainment service provider company serves their services throughout the world. The classic management textbox theory has predicted that the company should have failed now. While providing services to the company, it has been found that due to lack of security agenda the rate of competition was increasing and the service of this company is lagging behind. Instead of getting competitive advantages the company was facing tough competition from the other companies. Beyond the DVD distribution second act had also been created by the Netflix stock. Due to the knock of innovation at the doorstep, the company wills to change their platform from the previous one to the cloud based one. After identifying the problem, the different changes those have been needed and the changes occurred after the digital disruptions are also elaborated in this report.
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